Category: Technology

The economic value of shitty crypto

On By Chen Yu YanIn Bitcoin, Fundamental Analysis, Trading, UncategorizedLeave a comment

Dear uninformed readers,

We are all delighted/distraught/dismayed/disillusioned/disintegrated/disembowelled/distressed/destroyed by the recent spike in bitcoin. I myself made some bold claims about it hitting $100k this year and will continue to stand by it (unless I’m proven wrong…). Anyways, the topic today isn’t regarding bitcoin, or even the other smaller yet still viable and heavily traded cryptocurrencies, I’m here to talk about ICO’s and the far smaller and less traded cryptos and how they scam investors into their ‘concepts’.

From even the most basic understanding of finance, we know that if something can make money, peole will rush into it. Scams and Ponzi schemes popping up all over the world despite laws and heavy punishments against it is proof enough that as long as it earns enough money, fuck the consequences. It also proves that there are plenty of people, both sophisticated and normal, wealthy and poor, smart and dumb, across the entire spectrum of the species we call homo sapiens, who are willing to invest in something they believe in. This believe can come from a plethora of reasons, can be ignorance, can be trust (in a friend or family member), can be boredom, but all of these reasons are driven by the underlying greed that drives forth the advancement of humanity. I’m not saying that greed is bad. As a student of finance, and somewhat advocate of a free market, I believe that greed is good. It will lead us to waking up earlier, to loving those around us, to making the world a better place. But I also have to concede that it does come with its issues. Losing money and missing out on longer term gains being one of them.

The reason why people lose sight when greed takes over is the basic premise of behavioural finance. Why do we buy lottery tickets? Why do we go gamble at casinos? Why do we do anything with a negative expected value? How do we value infinite expected value games? All these ideas come into play when we look at the deep dark corners of the crypto market.

Let’s face it, as much as we say buying bitcoins is to stick it to man, it is still mainly used by that seedy neighbour whose place always has that stink of weed and bad hygiene. Of course, I’m generalising but take a stroll around the dark web and you’ll see that everything from drugs, to arms, to ‘jobs’ are all transacted via bitcoin nowadays. The decentralised settlement system that cryptos pushes as a forefront feature is why they are the payment system of choice. However, there are issues when using them as currency. The first being, circulation. They simply don’t circulate enough for people to use them on an every day basis. The second is the reason why they don’t circulate. Because they don’t have a stable value! If the currency is pegged to say the US dollar (USDT for example), then it is limited in the amount that they can circulate in the market. This can cause a problem when the growth stage kicks in (see why the US unpegged their currency to precious metals). If it’s unpegged, then all hell breaks lose and we have things like bitcoin which gyrates 20% overnight. Furthermore, for most people who releases ICOs to the public, they want to make money! I know it’s hard to believe that they don’t do it out of charity but it’s true. They’re in it for the money. It’s a lot harder to make money when you have to hedge all the coins according to a peg.

So that brings us to all these ‘concept’ cyrptos. You know, those ‘coins’ that exist because they are used to facilitate paying for electricity, overseas transactions, trading options, ownership of a company, paying for porn, paying for roast chicken (yes this one is real, a friend of mine is making it as I write this) and such and such and such… There are simply too many to mention. Anything that you’ve heard of is probably leagues beyond this (including things like Dogecoin. Yes, Dogecoin is actually quite big…).

We start with the concept. It is usually some bullshit made up to give credibility to the venture and make it sound like it’s much bigger than it is, a scam. It could be based on a per MWh usage of renewable energy generated by some African country that employs thousands of underprivileged children working to clean the solar panels. Wait, no, that’d be child labour. Umm… let’s say it generates thousands of jobs and literally brought light to hundred of smaller villages that would otherwise still be eating casava leaves grinded by stone. Now, buying this crypto not only will make you rich, it will also make you a better person but also very wealthy because African nations need MOAR POWAH!!!

Next we come to marketing. This concept must be backed by some white guy who won multiple philanthropy awards and is extremely rich but also low key (which is why you won’t ever find him on say, the Forbes list). He’s doing this and coming out into the limelight for the world! He’s doing it and sacrificing his privacy that he values for the future! Now, he’s generally backed by a board of diversified people both men and women, with a few LGBTQ and/or disabled. It’s a big family! It’s a RICH family, who even though could totally just invest in the renewable energy project themselves and profit greatly while doing the world a favour decides that they want to share the profit with all the investors who believes in them. Theyw ill team up with some ‘executive’ at a major bank (generally speaking a fraud who may or may not have even worked in any bank). They’re too poor to do proper roadshows so of course they will simply be sending out mass emails from some seeds list they bought filled with information of people who were too cheap to pay for porn, or expected that some naughty but not too good looking middle aged women were out and about in their neighbourhood looking for a good time. Of course, they will also hit people up on social media and join Discord channels or reddit communities and lure them into their own chat group.

Now that they have a bunch of lonely, vulnerable guys who probably joined the chat because the person inviting them really ‘connected’ and has ‘huge boobs’, they will be lured into a very ‘prestigious’ chat group that they only managed to get in because their ‘friend/relatively/anybody who is close but definitely not a partner because godamnit they are still single because they’re the soulmate of every guy they lured in there’ is a professional investor who has connections in all the right places and can get access to this crypto before it’s released to the public. Now, all the marketing in the previous step will be pushed down the throats of these people like… ok, no more similes. But my point should be crystal clear now.

Payment. Of course you’ll need to pay them, but they only accept bitcoin/USDT/some kind of crypto that is well known and liquid and NOT any kind of bank transactions that can be traced. The money will be transferred via a ‘third party platform’. Their coin can ONLY be found there. And the pricing and supply and demand are more opaque than the lead linings outside a nuclear reactor. So now that you invested, the money starts to grow because all the prices are manipulated on the back end of their platform. Other people in chat sees you flaunting your enormous e-Penis from your recent gains (that you definitely cannot withdraw because withdraws are only possible once the ICO is completed) and all the ‘pretty girls’ in the group stroking your… ego, and will soon follow. Of course, the group gets bigger as people start to call more friends and family to join in on this once in a lifetime opportunity.

Scammers who are brave may even have offline meetings to booster confidence in their project. A quick lunch event with some people in the group will go a long way to validate their venture. Finally, they delete the group and run for it leaving everyone there distressed and unable to get back any of their investments.

The precise method they use will obviously differ. I am only going through what I have seen personally and what people around me have gone through. So to sum up, the economic value of shitty cryptos is for scammers to rob you of your money. that definitely doesn’t cover all of them, but those that remains are statistically insignificant at 0.1% level using the t-test

Best regards,

The uninformed trader

Bold Calls: Jan 2021

On By Chen Yu YanIn Bitcoin, Equity, Fundamental Analysis, Technology, Trading1 Comment

Dear Uninformed Readers,

I’m back! After a long hiatus that’s caused by study and being lazy in general, I am back to being able to focus on what I enjoy best, Netflix and chill. And also studying the random, dark, untouched areas of the market. Anyways, this new bold call update will signify my return and hopefully (New Year Resolution time) I will be able to update regularly this year (aiming for weekly but will be happy if my update frequencies can average fortnightly).

So before I start, I’ll have a quick summary of the results. My previous bold calls pretty much all came true. Property prices peaked in 2017 in Australia and equities did great (11.46% returns for the ASX 200). China smashed my expectations and increased 21.78% and closed 4030.85. Basically, I’m a lot less rich than what I should be considering how good I am and how right I was… *sigh*

So on a new note, let’s talk 2021. I start by focusing on a few fields this year. China will certainly cause geopolitical chaos with the US this year as RCEP kicks in. The deals they’re making with the EU won’t help either. As geopolitical tension rises, so does Gold and Bitcoin. The relentless QE programs and record low interest rates (that doesn’t look like it’s going anywhere higher anytime soon) will essentially devalue any currency. The thing with trade is that if you lower your currency and gain a competitive edge, it really fucks up the balance. So the current trend is, everybody print money, and we all deflate together, and we all die slowly… together.

First bold call, Bitcoin is going to $100,000 baby!!!! HODL!!!

Second bold call, Gold will hit $2,500.

Last bold call, the S&P500 will hit the 4200 mark.

Now to explain myself. Once again, I’ve pretty much put all my eggs in one basket (the QE basket). The amazing, fabulous, miraculous effect of printing money based on credit is that you can keep doing it. As long as you have more credit. And right now, the US has CREDIT! With Trump out (and I’ll explain what happens should he refuse to leave power later) and Biden in, we can expect more money pouring into the market to make sure the economy doesn’t shit itself (see image below).

This is exactly how the Feds work. True story.

What happens is that this money will end up in the hands of corporations. Even if it’s handed out straight to the public, they will need to spend it somewhere, let’s say paying for their mortgage or buying consumer staples, the corporations are where the money will end up at. The remaining money, will push themselves into whatever looks half decent to invest and drive up their prices as investors, both uninformed and informed rush in because let’s face it, it’s free money! As long as credit holds up, this is inevitable. As money rush in, the corporations make money, the stock markets go up. And because there’s so much money in the markets, given the ratio between the inflow and the size of the economy, money is suddenly worth a lot less (not necessarily inflation, because everyday items may not increase that much in price, just the investment products including real estate).

Oh, that reminds me. Fourth call, real estate is back! I’m thinking 10% in the Australian markets.

Anyways, continuing on with my rambles, as money is worth less relative to these investment products, people rush in natural to attempt to beat the basic devaluing of the currency. Bitcoin prediction is because everyone is crazy! And crazy means it will shoot to the moon. And that’s pretty much it… 2021 will be fairly uneventful (when viewed in this angle).

Ooh, almost forgot, if Trump doesn’t want to leave power, scrap the S&P prediction. Gold and Bitcoin should still go up because duh!

Anyways, after a shitty 2020, I hope you all can have a good 2021. My best regards to you and may you be happy everyday.

Yours Sincerely,

The Uninformed Trader

Bold Calls: Jan 2016

On By Chen Yu YanIn Bitcoin, Equity, Fundamental Analysis, Futures, Policy, Technical Analysis, TradingLeave a comment

In private, I’ve made some bold calls. This affects my trading and I see it as a way for me to exercise my ability to predict long term movements based on an unique style of analysis. I won’t bore you with specifics as that isn’t the point of this entry.

In 2015, over a ramen lunch with close friends, I made a bold call to say that the US equity market will fall 30% from the peak, the Aussie will fall 40%, and China 50%. This was around June 2015. So far, China is looking to have almost hit my target as it is almost touching that magical 2600 mark. Honestly, being a massive Chinese hedge fund, the Australian markets is gonna tank a little as well. I guess we’ll see some results by mid year. The US markets are probably the most difficult to predict. I believe it will be heavily affected by who gets elected for presidency this year.

My new bold call for 2016 is Gold (gold vs US to be precise). I am fairly bullish on gold and I expect an initial target of $1200/oz followed by a rally to $1400/oz (it is currently $1100 as I am writing this). This is based on increasing volatility, the distrust in the growing Chinese/other emerging economies, a beautiful technical bottom plus reversal patterns emerging.

My second call would be for bitcoins. As mentioned in my very first post here, the block chain technology is worth a lot of money. The ability to decentralize the settlement system alone is enough to save enough money to make Scrooge McDuck drool. This along with the fact that we’re half way to mining everything out means that suddenly there is a supply squeeze that can raise the prices faster than twitch chat raising dongers (a very specific reference so kudos if you got this one). My personal target is $1000/coin but I believe we have to wait for around the end of the year for that to come about.

To sum up, bitcoin and gold will be the best performing currencies in 2016 (I’m counting gold as a currency because it pretty much is) and your phone is ringing because I’m calling it!

Some thoughts on gaming: urn reel monies

On By Chen Yu YanIn Gaming, TechnologyLeave a comment

Continuing from my earlier lengthy article, I am going to talk about what I think will happen in the future. The trend has been somewhat established and the wheels are now turning. Needs a bit of grease but generally speaking, it sounds pretty good… well, not sounds pretty good since it needs grease but you should be able to come to the correct conclusion despite the bad metaphor. I must admit that I once again succumb to the temptation of bad research (as I have a few deadlines looming chillingly over the horizon) but I will aim to provides links to my sources whenever I feel inclined to do so.

E-sports is essentially the name of the game now (all puns intended). As the name suggests, it is considered a sports, with professional athletes competing for the top spot in global scale events. ESPN has covered the growth of e-sports as well as notable events across different games. With the massive reaction and cheering of TI5 still ringing in my ears (I need to get that checked out), the e-sports community is pushing ahead by organizing not just bigger events, but more events, allowing the general gaming community as a whole to enter. Amateur tournaments are event being hosted in backwater countries like Australia!

Lured by the scent of money, betting companies are now entering the fray. I am not talking about betting hats (please refer to my previous article for an explanation on hats), I am talking about real money. Sportsbet (a major player in Australia) is currently covering the Nanyang Dota2008 2 Championships, LoL World Championships, CS Go Dreamhack Open, and I’m sure there’s more but I got the idea after scrolling through 3 pages. As with fantasy baseball that has been popularized relatively recently (compared to the actual sport I guess), fantasy e-sports, along with gambling is clearly going to be a space worth watching.

Seeing as I live in Australia, I enjoy simple things such as using the metric system, riding in my kangaroo to work, avoiding dropbears while commuting, and using Aussie statistics. From the Australian Wagering Council website, I found some interesting facts and figures. Sports betting only contributes 1.2% of total betting revenue, around AUD$200 million. It has over 2 million Australians involved yearly, which doesn’t sound impressive until you realize that we have a total population of around 23 million. Now, I know that Australia is not something most people would consider as a standard, and that we do have a gambling problem like a middle aged alcoholic found in a casino… which is a fitting simile when you realize that most of our gambling laws are made under the same act as our alcohol laws.

While gambling doesn’t provide much investment opportunities, outside of the current rudimentary system of calculating odds which can be arbitraged by those who are keen enough to accumulate data for themselves, the e-sports community provides other interesting opportunities. One of the more prominent would be Virtual Reality (VR). I assume that it is already common knowledge that some of the larger tech companies are addressing VR as a serious investment opportunity. Looking at Oculus Rift, the version that I’m referring to is due to be released Q1 of 2016, it essentially brings portable entertainment into the real world. I believe I’ve made jokes about how the real world has awesome graphics with crappy gameplay. Well, that’s all about to change if I can be seeing the world through a VR augmented lens. Hot girls? Check. Zero need for human interaction? Check. ability to immerse myself fully and integrate my current technology into it (you can plug in your phone)? Check. Well, I guess this is where the human race goes extinct. Not by nuclear warfare, but by being too obsessed with virtual things such that all productivity drops to a level where only the maintenance of said virtual world is sustained. Kind of like Wall-E.

One step further is the world of augmented reality (AR). Looking at companies like this must truly make one reconsider the concept of reality. I just came back from Melbourne, where I played a VR/AR game. It was a Left 4 Dead styled shoot ’em up zombie first person shooter. Apart from the fact that you cannot adjust the field of view, so the focus makes people like me suffer from motion sickness around half an hour in, the game was pretty good. There are some other problems with the actual aiming and the fact that there were some other restraints, it was a pretty good experience. Nothing good enough for me to actually name them but enough to give them a mention so that if you’re interested, you can go google for it.

Major tech companies such as Facebook, Google, Amazon are all investing in some kind of ‘reality’ technology. Perhaps in the future, all our wants and needs can be fulfilled by virtual or augmented reality. To the point where we can simply sit back and consume virtual products that are delivered straight to our brains via the headsets. Where the world’s only professionals are pretty much those who live in the real world maintaining the servers and creating newer and better ways for the hardware to tickle our pleasure sensors in the brain. It seems that if there is artificial intelligence set out to destroy us, this would almost seem the most logical and fool proof. With everything we want at immediate disposal, the need to procreate etc. all disappear and the human race eventually dies out in this slippery slope scenario. On the other hand, I get to live in a world where I get to sleep all I want and eat everything I want and have fun with whomever I want. Sounds almost fair.

Hmm… the matrix almost sounds like a nice place to live. I’ll take that blue pill thank you very much.

A brief history of the gaming industry in my mind

On By Chen Yu YanIn Gaming, Technology1 Comment

I’ve been a gamer since I was little. I recall it started with the scrolling bullet hell styled games as well as the Pokemon series. Nothing was really quite like that initial experience of holding a Gameboy (and I’m talking about the original black and white brick, none of that coloured crap). And thus begins my boring story of my video gaming history (I swear to god, Pokemon is just a gateway drug). I will get to how this affects money very soon but allow me to indulge myself with the story of my ‘addiction’ first. Final Fantasy, Visual Novels (technically not a series of games but I’ve played far too many for me to name by series), Silent Hill, Dragon Quest, Tower Defence (a lot of different ones), Dota 2, Starcraft, Warcraft, L4D (it’s around this point where I wonder if I possibly overdone it in my last 24 years on Earth), Pokemon, Warhammer, Super Mario, CS, Red Alert, Half Life, and I honestly can go on for a lot more but I’d rather not give any more since my high school will probably want to ask questions (like where I was for an entire year or two rather than in class).

Regardless, the video game industry is huge nowadays. And the industry is not simply just producing games alone now. Derivative products like streaming (where you broadcast yourself playing a game), commentary (often done over streams where you comment on professionals or just simply others playing a game) are also massively popular. Sponsorships from both hardware and software companies allow professional gamers to live in relative comfort while doing something for a living that would make a teenager roll around in envy. Let’s start from the top though.

Games, in the traditional sense, simply makes money for a company from the revenue they generate through their sales numbers. If you think about it, it is similar to how movies are made nowadays. You have research into new technology, you have story writing, scripting, casting (for voice actors, or maybe actors for cut scenes in game), developing, and the sales it self. Of course I’ve given an incredibly brief overview, but you should get the idea by now. So you sit at home, in your soft yet supportive chair, leaning back, taking a quick sip of your dry red, and thinking about what this all means (please correct me if I’m wrong about how I imagine you guys). Quite simply, the size of this industry is starting an exponential growth. I like trends, and I sense a strong trend.

Skipping ahead a little, Dota 2’s The International (pretty much the international championships) had a total prize pool of a little over $17m. By comparison, Wimbledon (something we should all be fairly familiar with) has a total prize pool of approximately $42m. Now, this is a lot more than $17m, but I should also note that the total Wimbledon prize pool reflects both singles men, doubles men, singles women, doubles women, and the singles and doubles wheelchair etc. Not to mention that the winner takes home around $1.6m whereas the winner of TI took home $6.5m (so when divided among the 5 on the team, that’s around $1.3m each… EACH). This is a mind numbing amount of money from just one tournament. Now, Dota 2 has implemented seasonal multimillion dollar tournaments, spanning different continents generating millions for the company each time. How you ask? Quite easily. By selling hats!

Black top-hat
You jest but in some cases, actual hats like these… except not real

I’ll get to the hats very soon.

So back to the original discussion. The concept of computer gaming has evolved past simply buying and playing. There are ‘freemium’ games where it is technically free to play but you can pay to enhance your experience (I’ll expand on it with the hats concept), and subscription games where you have to pay a fee periodically to continue playing, a good example would be World of Warcraft. Other notable ways they make money (other than selling hats) would be DLCs (downloadable contents) where they pretty much don’t release the full game and only a part of it and make you pay for the rest (I understand that I sound bitter but you’d be too if you’ve been where I’ve been… and why are things fundamentally essential to the game in a DLC anyways? Aren’t I essentially paying $100 for a $70 game? What is wrong with you?).

So what about hats? What are hats? If you meant something other than the $300 fedoras you wear, or the ridiculous lighthouse looking things that some women wear to horse races, then it must certainly be in game cosmetics. In game cosmetics are referred to ‘hats’ due to the fact that one of the most famous cases is from a red hat. Possibly the first time people realised that hats are worth hundreds of dollars. Then there are things worth thousands, and even tens of thousands of dollars (rare couriers in Dota 2). What drives people to these purchases? Well, apart from showing off your enormous e-penis and fat wallet, it is pretty much conditioning. Conditioning in the sense that you start with smaller purchases and then splurge big time once you pretty much lose sense of money within the game. I have personally spent a few hundred in it (every last cent was worth it I tell you!). Apparently, making around 50 million is pretty easy that way. They kept 75% of the money from selling hats and only 25% went towards the prize pool for TI. Well, by ‘they’, I meant Steam. Go check it out if you play a lot of games.

I should go back to the trend I mentioned earlier. That exponential trend that is. Using Dota 2 as an example again (I can use things like League of Legends but no), the very first TI only had a total prize pool of $1m. Doesn’t seem like much? It was the largest prize pool in video gaming history at the time (2011). In the next year, 1.6, then 3.8, then 11, and all of a sudden, 17. The growth is unexpected.

Rather, the growth expected.

Here is the issue, this trend is not only with Dota 2. LOL, Starcraft, CS, you only have to go to twitch.tv (no seriously, go there to check it out. The gaming society is amazing) to really understand the scope of gaming. Over 250,000 viewers are watching the streams at almost any time of the day. During large tournaments, there are over 1 million viewers. If we extrapolate to other platforms like Youtube, and we look at videos from famous streamers like PewDiePie (I’m using him because he’s the most famous who reportedly makes over $4m from Youtube revenue alone in a year, check Forbes if you doubt me), the advertisement revenue, the investment opportunities are substantial.

And only now do I realise that my word count is well over what is acceptable… So I’ll end this here. I will write more in a later article when I feel like digging through the endless pages of the secondary hats market (which I indubitably will). So I’ll just wrap this up ASAP.

Newer games, better technology, faster computer processing, it seems that the only way this can possibly go is up…

But… my wallet…

So… time for Bitcoin Futures?

On By Chen Yu YanIn Bitcoin, Technology1 Comment

Recently, the US Commodity Futures Trading Commission (CFTC) has pretty much settled the argument on whether or not Bitcoin, the popular virtual currency, can be regulated. They filed charges against Coinflip Inc but did not impose any penalties and apparently was settled without anything being confirmed or denied. I am not saying that I expect to see Bitcoin futures any time soon but trading Bitcoin contracts on the CME would be pretty sweet (albeit unlikely). For more information on that, please go research with a few keywords on any search engine and you will pretty much find all the articles that are useful in this regard. I am not writing this to provide any insights and to argue whether or not the CFTC was correct in their decision making, rather, I wish to highlight the more prominent and less discussed (nowadays at least) topic of why Bitcoin is worth anything at all!

Though… I should just state my opinion, just for the record. I do agree that it is a commodity. Bitcoin is used more for investment than purchases. Most of the people either trade it or buy and hold similar to investment in equity or gold. Technically, you can also buy goods and services using gold at whichever store that finds it acceptable to take gold as payment (I dare say most would if you give them enough) but most regard it as something to hold (or wear, I don’t judge). This property is congruent to what we can observe for Bitcoins. Some very specific stores accept it as payment, while most prefer to buy it simply to hold (I have yet to hear of anybody wearing Bitcoin as bling so please inform me if you find some photographic evidence). All in all, I agree that it should not be considered as a currency due to (and I’m gonna give a few other examples that I’m too lazy to flesh out but should be fairly obvious. It is a certainly failure as a research student but I prefer to see it as a win for my laziness) the lack of liquidity, relative focus in investment purpose, and the small net value (calculated in the billions rather than trillions like mainstream currencies).

A lot of people marvel at how Bitcoin went from practically worthless to over $1000 to the now $200 per coin commodity (and I use that word in a very general sense). Ooh, I should mention that those values above are in US dollars. I live in Australia but I’m gonna try to give everything in terms of a better (read: more useful finance-wise) currency. It seems that people nowadays have all axiomatically accepted that Bitcoin is worth something. Where that comes from no longer seem to matter, or at least discussed in as much frequency as it once was.

Popular opinions include the underlying technology of the Bitcoin itself, the idea and innovative method and how much people treasure a cryptocurrency that gives anonymity in the current age of big data. This is one that I personally support as I believe that these all give value. A fundamental principle of business is that it must create value for its customers and clients. In the usual sense, this value can be reflected by the generation, or aid in generating wealth. However, Bitcoin offers something totally different. it doesn’t generate wealth, but allows wealth to be distributed anonymously and safely. Arguments for illegal uses aside, this makes a very interesting and very handy way for businesses to conduct transactions. Recently, 14 banking organisations (including Lloyds, Barclays, UBS, Commbank, Goldman etc.) are looking to invest in Bitcoin application and technology.

Some argue that the technology of Bitcoin can be applied to replace the current central clearing system of markets. This could be true given that the participants who now also have a new duty do not increase their prices to cover the additional cost, or raise prices simply because they’re providing a new service. Block chain and crowd verification is useful perhaps to fool HFTs, but that doesn’t seem likely either as the market requires transparency to function more efficiently (my PhD research may make me a bit biased in this regard but the evidence for this is too strong to simply ignore) so purely from the perspective of increased costs to the market, we cannot justify the block chain applications.

Alternative currency? What about using it as an alternative currency for places with political instability or high inflation? Well, Bitcoin isn’t really known for stability. There are also other currencies more suitable for these situations, like using the US Dollar for example. It is stable, it is big, and it is trusted by anyone who knows where the US is on an atlas. So this argument also breaks down right from the start.

“But wait!” You exclaim as you take a sip of scotch and readjusts your tablet and sitting position due to the fire from your fireplace starting to get a bit too warm (this is how I picture my audience…) “If Bitcoin can’t be used in the secondary market, and can’t be used as a currency, and is an unstable commodity, what on earth is it good for?”

A good question (as expected from my reader!). Well, it is the concept that decentralizes a clearing system that makes it so useful. The ability to remain anonymous while clearing transactions based on a general consensus (OK… I know I didn’t sell that well) is something that we can really use soon in the future where all our purchases will be recorded in the ‘big data’ one way or another. When supermarkets are emailing me discounts on feminine hygiene products because I went shopping with my girlfriend once or twice, it really makes you think. Maybe if I paid for her stuff with bitcoins rather than my card that is linked with my rewards card, I won’t get all the ads. Anonymity is, to borrow the slogan from Mastercard, Priceless. On the other hand… if we all use Bitcoins, think of the value that we miss out from the reward points and the chance to save 20% on tampons…

Think of the points people!